How to Properly Keep Accounting of Cryptocurrency Transactions in Poland: What is Important to Know

In recent years, cryptocurrencies have become an integral part of the financial world, and Poland has not been left out of this trend. However, managing accounting for cryptocurrency companies is not just about adding a new element to traditional financial reports. It involves a range of specific tasks and requirements faced by both startups and established market players.

If your company engages in cryptocurrency transactions or plans to enter this market, it’s crucial to understand the key aspects of cryptocurrency accounting in Poland. Let’s explore the main considerations for accurate bookkeeping and fulfilling all obligations.

For cryptocurrency transactions, tracking profitable and loss-making deals is crucial. When you purchase cryptocurrency, it’s important to record the date, purchase price, and quantity of coins. During sales or exchanges, you must record the sale value. The difference between the purchase and sale prices constitutes your profit (or loss).

Each transaction must be documented in accounting books, including its value in fiat currency (e.g., PLN or EUR) at the time of the operation. This is necessary for accurate profit tax calculations and meeting other tax obligations.

When cryptocurrency is exchanged for another cryptocurrency or fiat currency, it’s important to understand that such operations are also taxable. In Poland, exchanging cryptocurrencies is considered a taxable event, even if you do not convert the crypto into fiat currency. Thus, you need to keep detailed records of all exchanges and calculate potential gains or losses arising from these exchanges.

This can be a labor-intensive process, especially if you have numerous transactions involving various cryptocurrencies. An effective accounting system can help avoid errors and penalties.

One of the most critical aspects of operating in the cryptocurrency sector is complying with anti-money laundering (AML) laws and reporting to the General Inspector of Financial Information (GIIF). In Poland, companies involved in cryptocurrency activities must submit reports to the GIIF if they conduct cryptocurrency exchanges or provide custody services.

GIIF reports include information about clients, their transactions, and any data that may indicate potential money laundering. Non-compliance with these requirements can lead to severe fines or even criminal charges.

For cryptocurrency companies, proper preparation of financial statements reflecting the company’s cryptocurrency assets and liabilities is particularly important. It is necessary to accurately account for changes in the value of cryptocurrencies and use appropriate valuation methods for such assets.

Since cryptocurrencies do not have a fixed value, their accounting can be challenging. However, there are methods to minimize risks and ensure reporting accuracy. It is crucial to differentiate between profits from cryptocurrency trading and capital gains from cryptocurrency operations. This distinction is also reflected in personal income tax reporting.

With the introduction of new European regulations for cryptocurrency companies, such as MICA (Markets in Crypto-Assets Regulation), it is vital to understand the requirements now imposed on cryptocurrency operators in Europe, including Poland. These changes pertain to licensing for cryptocurrency companies and the implementation of mandatory AML policies.

Additionally, companies working with cryptocurrencies must comply with new requirements regarding crypto-assets and mandatory registration. These regulations not only impact the legal side of the business but also its accounting, as every new rule may require changes to financial reporting and tax calculations.

One of the most frequent mistakes is underestimating the complexity of cryptocurrency accounting. For example, incorrect capital gains calculations or discrepancies in reported data can lead to tax penalties and legal consequences. To avoid such situations, you must carefully monitor every stage of accounting, including proper report preparation and transaction verification.

Engaging experienced specialists in cryptocurrency accounting, like those in our Polish branch, will help you safeguard your business and focus on growth and development.

If you’d like to learn more about cryptocurrency accounting or seek advice on managing cryptocurrency transactions, don’t hesitate to reach out to us.